Oil slides

The pan-European Euro Stoxx 600 Indexslipped further into negative territory, finishing 1.7 percent down, with all major bourses trading over 1 percent lower.

Markets had kicked off on a positive note but a price slide for oil, around 11.30 a.m. London time, weighed heavily on benchmarks.

Crude oil futures fell for a seventh straight session on Monday, their longest losing streak since mid-2014, on growing fears that the global oil glut would worsen in the months to come in a pricing wars between key producers. Both Brent crude and U.S. WTI have pared some losses, trading around $37/50 and near $36 respectively.

Companies like Tullow Oil and Seadrill fell to the bottom of benchmarks, both over 3 percent down.

Investec, Old Mutual soar

A speech from ECB President Mario Draghi did little to lighten the mood for investors. Speaking in Bologna, Italy, Monday, the central bank chief reiterated his call that the bank stood ready to act and once again added that governments of the 18 countries that use the euro should also be playing their part.

In stocks news, Investec rose to the top of benchmarks. The lender – which has a heavy exposure to South Africa – bounced back as much as 8.5 percent after losses on Friday after the country named a new finance minister. Insurance company Old Mutual also saw gains of as much as 7 percent on the news fro South Africa. However, both stocks have pared, with Investec ending the day up 3.15 percent and Old Mutual 1.3 percent higher.

Renewable energy players in Europe have been trading higher, after global leaders cemented a deal at the United Nations climate change talks in Paris which aims to limit global warming to less than 2 degrees Celsius by the end of the century. Vestas Wind, Nordex and Solarworld all finished trade higher.

Prices in gold and copper slipped further on Monday, as weak oil prices and mining stocks continued to underperform. Glencore shares tumbled over 6 percent, while BHP Billiton, Anglo American and Antofagasta were all below 3 percent, with Glencore off 6 percent.

Fed hike coming?

The main focus for investors this week is the U.S. central bank, which is widely expected to raise interest rates for the first time in seven years. The Fed is expected to raise interest rates by 25 basis points on Wednesday and only very gradually thereafter.

"It's the biggest week of the year – or it might be.. or it might not," Bill Blain, a strategist at Mint Partners said in a note on Monday morning.

"Although the hike is fully priced in, the markets seemed a tad uncertain about the consequences of a Fed Hike last week – wobbles in stocks and the oil price down to $35 as Saudi and the Russians just keep pumping the stuff out like there is no tomorrow."

Asian equities traded mostly lower on Monday. The Chinese market bucked the trend, however, and traded up, boosted by upticks in shares of brokerages and banks.